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tv   Tonight From Washington  CSPAN  September 29, 2011 8:00pm-11:00pm EDT

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thank you and we are adjourned. [applause] [inaudible conversations] ..
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>> gal, a discussion of u.s. trade initiatives in afghanistan and central asia. this 90 minute event is hosted
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by the central asia caucasus institute and a train to study program, which is affiliated with the school of advanced international studies at johns hopkins university. [inaudible conversations] >> good afternoon, ladies and shot him in. my name is fred starr chairman of the caucus institute. the program today is cosponsored by the center for strategic and international studies and i am pleased to introduce our co-convener and friend from the sis, anger questions. let me also note that there are various books and studies on today's topics, some of them free. and these are available out right after the program.
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on the 20th of july in chennai, india, secretary of state clinton had this day. she said, i want to be very clear, the united states is committed to afghanistan and to the region. we will be there. yes, we are beginning to withdraw combat troops and transfer responsibility for security to the afghan people, a process that will be completed in 2014. but, drawing down our troops is not the same as believing or disengaging. and she continued, historically the nations of south and central asia were connect it to each other and the rest of the continent by a sprawling trading network. let's work together to create a new silk road, not a single, but
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an international web of network of economic and transfer connection. she then continued further and spoke about railroads, highways, pipelines, i'll let your client and beating the passage of goods across closed ports flow borders. then a week ago, exactly a week ago, secretary clinton met at the united nations which are in with german foreign minister vester valley and afghan foreign minister, bristol to pursue the concept of a new cranes taught mental transported trade corridor to afghanistan. on the same day, the world bank hosted a meeting here in washington on the same subject. now, the purpose of this program is to ask, what is the united states do silk road strategy?
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where is it headed? and how does it relate to other initiatives worldwide? to let us start with the context, a so-called trained to initiative has been the initial development strategy if the government of afghanistan for three years. we are honored to open today's program with a statement from his excellency, sham bathija, who is minister of economic affairs that the government of afghanistan and senior advisor to president karzai. he is connect you with us from new delhi. thank you very much for participating in today's program. you have the floor.
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>> i am on official duty tellier, so i am regressing from this region. first of all, i am pleased to see you, professor starr, after long interaction of the jfk harvard meeting a few years ago. since it is a bit late here in new delhi, let me share with you and thought to open the discussion. i recall an occasion when i saw and remember very well, when and where sadat of egypt visited israel.
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a sort of noise came out from this site announced the next president, what took you so long, and wire? that's what the prime minister. and when he heard that, he responded that, very nicely he said i am just here to uphold me. it is similar for you that you called and here i am. it's a pleasure to be with you. and good to see everybody. let me start my remarks. your excellency and secretary
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broughthormats, professor miranda, secretary starr, sudbury and dr. subfloor at the sis. ladies and gentlemen, i would like to extend my appreciation to the essential asia caucasus institute at johns hopkins site and the center for strategic and international eddies for kindly hosting the foreign on a new silk road strategy. at the heart, this dialogue and dialogue in kabul and elsewhere lately today, such as during the u.n. general assembly last week with contributions from more than 20 foreign ministers, senior u.n. leaders in the head
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of the asian bank seeks to advance a vision of regional economic cooperation to achieve a stable democratic and prosperous afghanistan for the benefits of the surrounding regions and indeed for the wider international community. if i stress when i am launching the new silk road initiative one year ago at the fourth regional economic corporation for afghanistan, held in istanbul, only a genuine regional economic strategy and regional cooperation efforts involving all countries near afghanistan will ensure the country is placed on an enduring path toward stability and prosperity. though when i accept the invitation to speak, i had every
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intention to be with you in person today, but it is quite fitting that i am able to use modern technology she's to have a conversation with you by a long distance from the indian subcontinent, which has historically served as a major component of the silk road trading routes for many hundreds of years. secretary clinton's statement has so greatly indicated so. this region is also expect that to grow as an increasingly important trading partner for afghanistan, especially with introductions of south asia free trade agreements and afghanistan, pakistan transit trade agreement. it is no coincidence that the secretary of state clinton chose
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a reason speech in chile, india to announce the need for a new supervision invests and critical infrastructure and adopt a new trade rules for the 21st century across the vast continent of asia. similar to europe and china, india sheer market size today makes the measure destination and an end-user and other regional goods and services that make transit to afghanistan. indeed afghanistan strategy, strategic geographic significance lies in the centrality in facilitating to great asian trade and intelligence corridors. first, the traditional east-west corridor that link to asia with europe, but ever more important is the second, lesser-known
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north-south corridor connecting russia and the energy rich central to afghanistan with pakistan, india and other energy resources will countries of south asia. and history shows us, commerce utilizing the silk road, which is a collection of intertwined groups like the chinese roman civilization while passing through territories dominated by the persian and in and cultures. it's therefore truly represented the conversions of civilization and the source of interest across the regional and beyond. once again, it is this culture and interest of the initiative that we have joined to discuss today. we believe that this initiative
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can once again revived the shared prosperity that the asian silk road was provided across asia, consequently my government reveals corporation of the new silk road initiative as an integral part of afghanistan national development strategy and the kabul process. a final transition to increase alignment behind national priorities or common goal of full ownership responsibility and sovereignty. the nsi will incrsovereignty. the nsi will increase regional prosperity and stability to increase trade and investment. the resulting shared prosperity and job creation will reinforce efforts to promote reconciliation and reintegration of former confidence, which
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suffered an enormous setback last week with the assassination of my countries late president, professor rabbani. though not a comprehensive solution for all solutions at the alcan stayed, afghanistan views the wider close of the new silk road initiatives as operating hand-in-hand with my countries after to help create the conditions for political dialogue and successful transition. working closely together, afghanistan and international communities have made tremendous progress together over the past decades. for example, a great deal of far-reaching reforms have been made in areas of customs revenues, border management and other political, legal and
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regulatory reforms to facilitate international trade and investments vis-à-vis afghanistan. together, we have also message in afghanistan's most important resources as people by vastly increasing education, improving health health care for all outcomes. beginning with the start on the fifth of december, 2001, which i had the privilege to participate in, we have also established institutions of democratic governance that promotes and guarantee the rights of all citizens, women and men, young and old. numerous challenges however my in fully implementing this initiative, which will enable citizen throughout the region to leverage a multitude of
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potential benefits and opportunity. obstacles to regional economic cooperation, such as complex regulatory requirements and roads and bridges significantly impede cross-border commerce. and for example, afghanistan may today the market to transport our feeds by road to regional and international markets. or to transport iron ore by rail to customers. naturally, potential investors hesitate to make the plunge and instead the channel capital and emerging and economies. but i call myself afghanistan come in the future frontier and a new emerging market. but you do not have to be president of our fate. we note a parking organization
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plan, one that unifies our efforts in afghanistan with our neighbors and with our broader international partners. we believe that the new silk road initiative was an agreed set of priority and for start your crack is an emphasis on removing the barriers to efficient trade and transit can become the unifying strategy. specifically, the silk road initiative will pursue this ambitious yet practical undertaking by building the necessary transportation and energy infrastructure and establishing afghanistan is an efficient trade cannot team europe in southwest asia and russia and the central asian republics in pakistan and india. besides large-scale infrastructure projects such as
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new roads and power projects, the msr i initial group initiative emphasizes the importance of capacity building, trade reforms, communications and harmonization of cross-border procedures such as customs. having an efficient and harmonize the go attorney for you mark will bring predictability and consistency, creating a much more conducive environment for attracting foreign investments into our region. this is an area for which u.s. technical expertise has been particularly valued and beneficial over the past decades. and given the relatively low cost involved, we expect and hope that the united states will continue to provide leadership in this area among the major donors. finally, his chief economic
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performance of afghanistan's economic transition, division of the new silk road initiative is driven by both common aspirations and sheer challenges but the silk road based on the belief that commerce, based on a win-win proposition can raise the likelihood of the people across the region. to increase regional con activity and private dvd, are common initiative and partners across asia and beyond aims to transform our region by better leveraging the current high level of technical, political and financial resources being made available by the international community and attracting private sector investments. opportunities and challenges to regional trade and transit.
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some may wonder at the time of declining aid and military drawdown, how support for such a large undertaking can be achieved. edited by considered view that by threatening private capital to private -- public-private partnership, we can avoid losing additional versions on donor nations and traditions to a new economic development and prosperity. by choosing this fact, will also transform the nation of the economy from one dependent for an eight in contention to one propelled for foreign investments, domestic production but more specifically, this desire policy. moreover, for a strategy to be successful and rightly accepted,
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it must extend job opportunities for ordinary advanced and generate substantial economic growth in the reasonable timeframe. job creation is the highest priority for us. we will not be able to stabilize afghanistan without a vigorous job creation strategy. given that afghanistan's mineral weapon has been u.s. dollars in two to $3 some estimate even more, we believe that minimal development and regional con activity can maximize the use of local labor and generate export led growth in afghanistan and her neighbors. beyond are abundant natural resources, transit fees from the transfer of national gas and natural power, as well as transmit of good services about dan also maintain the potential for generating hundreds of
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millions of annual dollars for the afghan government. practical measures for action now i address a word for that. at present, all in tradition trade accounts were on the about 15% of the total trade, the road, rail provided by the new silk road initiatives can boost regional trade significantly. the new silk road initiatives was built on an initial, successful original organization such as the south asian association for regional cooperation and essential cooperation and essential regional economic cooperation and the solace of their bilateral agreements. here i want to highlight specific examples of progress already made in this regard. first, following more than three years of negotiations, afghanistan agreement was signed
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by the government of afghanistan and pakistan on july 18, 2010. with an extensive and skillful convening role performed by the united states in support of the afghanistan and pakistan government, expected to serve as a model for further bilateral and wider trade and transit agreements. the new silk road initiatives can also have to expedite after effectively implementing the for the benefits of the wider region. second, the government of afghanistan is strengthening border management cooperations of neighboring countries to ensure the united approach to address crosscutting issues, such as threatening trade facilitation, custom harmonization, environmental protection and encouraging regular and deeper dialogue on border security and management with the regional papers.
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breaking down barriers to trade and transit by reducing excessive democratic besiegers end of the government seeking activities could represent a hallmark of the new silk road initiatives. as the cost to start with ways to advance market progress in the near term. third, we have also taken significant steps forward in afghanistan, pakistan, india, which caused the international gas pipeline projects in recent months and i've witnessed it myself lathers with the president. and we have even commended for but many outside observers viewed as inconceivable in recent years. establishing a national railway, which i am now committed to, but the concept now for creating a national institution on the railway, which i have to report
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back to the cabinet at some point. bishara sharif has been already built. we are also in the process of contract team one of the biggest deposits in the world. some of the distinguished participants may wonder why and how private capital could be attracted by afghanistan. some even wonder if we are making a realistic assessment. indeed, a presence in afghanistan, we have a highly underdeveloped transportation infrastructure. we need to further strengthen procedural framework and to reduce unnecessary practices at the border. we have unfriended crack says especially at border crossings. we have continued insecurity and instability in afghanistan. yet, we have no choice but to
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forge ahead for a simple reason. they are all not simply observed unless afghanistan does not have a comprehensive regional trade-based economic strategy. for my country, the region in the world to be more secure, we must implement division of the new silk road initiatives. the way forward introducing the strategy for regional cooperation. specifically, we need to take full advantage of the comments is in istanbul to advance this vision to the new silk road strategy for regional, economic cooperation. the strategy should build on the dialogue and commitment made in regional foreign or past decades such as star, echo, operational
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organizations as well as the kabul process. at the same time, it should be rooted in the current unique historical context in afghanistan and its neighbors. in short, afghanistan finds itself at an historical crossroad today. either it continues to depend on foreign aid as the principal driver of economic development as well as foreign forces to safeguard its security or quickly shifts to a new model of development rooted in the dirt as the main generator of jobs and afghan national security forces is achieved guarantor of the national and personal security. for afghanistan, a landmark country to succeed in this transformation must break down the barriers to regional trade and transit. it must invest in the
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transportation and energy infrastructure to facilitate the growth of a transnational corridor and must attract foreign invest in it for near and far i've killed previously unforeseen and afghanistan. as i always believe, afghanistan is the future emerging markets. a nature into strategy for economic cooperation to advance this overreaching vision by presenting key principles, object design program priorities for consideration in istanbul. the key principles put and confidence elaborated upon recently in regional forms such as breakout, cairo, the strategy at jack is good further drop on the cochair statement prepared fine last week's new silk road
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foreign minister meeting in new york and programming and project priorities highlight new initiatives, such as national railways, energy pipelines from central asia in the extension of afghanistan agreements to afghanistan and northern neighbors. and while consultations towards the development of the strategy should be brought to us in both afghanistan and the international community and linked closely to ongoing consultations about afghanistan's national priority launch, special attention should be giving to afghanistan's immediate adjacent and wider regional partners, including pakistan, iran, central asian states in india. their active participation and shared division can determine the economic integration, resulting in a range of economic benefits of cross central and
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south asia. in closing, i'm thankful for the united states and that wider international community's many sacrifices to afghanistan transformation into a peaceful, democratic and self-sufficient member of the community of nations. our partnerships form the bedrock for catalyzing future efforts to both engage afghanistan's neighbors more effectively, as well as unleashing the full potential of our shared partners in the business community. we look forward to our continued cooperation for peace, prosperity and justice for all of our citizens as well as for the citizens of all countries in central and south asia and beyond. i thank you, sir. >> thank you very much. transport speaking from new
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delhi. [applause] thank you very much, sir. against this background, let us ask again, what is the united states new train to strategy and where is it headed? we are now going to hear from robert hormats under economic and agricultural affairs of the long-term senior member of the nsc and is vice chair of goldman sachs, he's uniquely qualified to address these questions both from the public and private to. mr. cheney. >> thank you very much, fred. it's a great pleasure to be here today and i'm particularly honored to be on a panel with
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sham bathija and juan miranda to talk about our new train to strategy. .. critically, this idea has also been voiced for many years by many afghani's. most notably for instance president karzai, who has said that afghanistan should aspire to be what he called an
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asian -- . the importance of improving connections between south and central asia and indeed between south and central asia and other parts of the world from china through to western europe and indeed parts of southeast asia with a center or a roundabout places like afghanistan and pakistan has made all the more urgent as we and our allies begin the transition process in afghanistan which will ultimately result in the complete handover of security responsibilities to the afghani's themselves. indeed the transition process announced last november in lisbon is well underway. already, seven provinces and municipal hell of these have been transitioned to afghan security leadership. today nearly 25% of the afghani
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people live in these areas. but i want to be very clear about one thing. just because we are drawing down our military forces does not mean we are abandoning afghanistan or the region itself. as president obama said in june, our efforts are aimed at building a partnership with the afghan people that indoors. this transition must be sustainable and the political and security effort must be complemented by progress toward increasing economic opportunities for afghanistan and the broader region. as the minister put a creation of jobs and economic opportunity are critical elements of the future of afghanistan if it is to be a stable and a productive place. that is why when secretary clinton announced the diplomatic effort aimed at wringing a political and to this decades long conflict, she included as a
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key component of this vision to integrate afghanistan into the regional economy and hopefully over a longer period neck of time into the whole continental economy which is an even broader issue. the basis of the new silk road vision is that afghanistan is firmly embedded in the economic life of the region it will be better able to attract new investment, benefit from its resource potential and provide increasing economic opportunity for its people and increasing hope for its people as well all of which are credible critical to its future stability and its future vibrant as a participatory economy and participatory economy. we also believe the new silk road initiative will be of importance to pakistan and can be an important way for pakistan to further develop its economy
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and provide jobs for its people as well. indeed we believe the new silk road initiative can provide a critical economic boost for all of afghanistan's neighbors. far to the east and far to the west. that is why secretary clinton cochaired a foreign ministerial meeting with 30 of her counterparts including all of afghanistan's neighbors in the new silk road vision one week ago today in new york during the u.n. session. the purpose of the meeting was together regional and international support behind the notion that as she put it, lasting stability and security go hand-in-hand with economic opportunity. of course as many of you well know, this vision for the region is deeply rooted in history. that is why it is called the new silk road. for millennia a spawning trading
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network criss-crossed asia, connecting east to west and north to south. it was a robust network on land and on sea. if you look at the history of the silk road it wasn't just one road. it was the network, spider web of roads and a spider web and network of transportation that involved land transport and sea transport as well. goods and ideas traverse the region. silk comities and porcelain came from the ease. ivory, textiles and spices came from the south and precious metals and wind and carpets came from the west. many religions were spread as well along the silk road including islam and buddhism. the places in between benefited from these connections in many ways. the once prosperous markets of herat and mazar-e-sharif grew as waypoints in the continental trading realms. over the years these trading
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realms whence morbid as faster sea routes came into use in regional divisions and rivalries, many land routes unpredictable and in fact very dangerous. as a result of afghanistan and much of central asia were increasingly cut off from the rest of the world. though it is located right in the middle of a rapidly growing continent, afghanistan became in many ways an economic dead end from any direction. afghanistan's isolation was deepened further by the soviet invasion and by the insurgency that emerged after the soviet invasion. this isolation was also a key you are in the taliban's rise which further isolated afghanistan from the region and from other parts of the world. in the future without jobs or the opportunity to choose a
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different more productive path, the afghan people were and would be left to the mercy of extremists, and that was the problem that they faced before the current government took over and before afghanistan and its friends had begun to come together to create a new vision, a new set of opportunities and new prospects for job creation throughout afghanistan, and this is a very major departure from the difficulties afghanistan has faced in the past, and the recent past. this presents a whole new vision of growth and opportunity for afghanistan which is not taste on isolationism, not based on extremism but based on connections, interconnections with the rest of the region, with the rest of the world and novels of new productive opportunities for the afghan people. afghanistan is today beginning
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to emerge from this isolation and has planned for continuing to do so and the minister has very eloquently outlined many of those plans and many of those ideas. though the infrastructure gap today remains large the answer is not only about building new roads and rail lines as important as they are. the region as a whole must focus on setting the broad context for sustainable growth, because all the countries in the region have an economic as well as the security incentive to do just that. and the international community must continue to find ways to support and encourage that growth. as secretary clinton said in chennai last july in a speech to which the minister referred, the new silk road vision means upgrading the facilities at border crossings such as india and pakistan are now doing at at the walk across thing which i had the opportunity to visit several months ago.
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there are many ways of doing this throughout the region. that is one particularly important example but there are many others. and it means also as the minister has alluded to, removing the bureaucratic barriers and other impediments to the free flow of goods and people are good means casting aside the outdated trade policies that are still major problems in the region and adopting new rules from the 21st century. and i want to underline again that the entire region stands to benefit from this expanding economic connectivity and not only the entire region, many countries to the east and many countries to the west because afghanistan is really in the middle of the whole continent and therefore more communication, more transportation and more connections can have a much wider benefit for afghanistan and for other countries in the region and for other countries across the continent just as the
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silk road did several thousand years ago. that is why we are supportive of initiatives that harness the selective economic strength of the region. for instance just today, and this is a very important new development, the indian and pakistani commerce ministers for the first time in 35 years, concluded meetings in new delhi and announced it path of further normalization of trade relations between these two countries. it was joined by hundreds of indian and pakistani business leaders who participated in this conference as well and last year afghanistan and pakistan took the brave step of agreeing to an up david transit trade agreement. the agreement that they reached will enable the international best practices and order crossings to take place and will harmonize customs arrangements. also they will reduce smuggling
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and increase government revenues from legitimate trade. both countries have discussed the potential for expanding the agreement to cover all of central asia. eventually i hope that the entire region from us donna to mumbai will enjoy expanded trade and transit cooperation. other initiatives seek to match energy from central asia with pakistan and india, to markets with significant electricity needs. the tapis pipeline would bring onshore natural gas from turkmenistan across afghanistan to markets in pakistan and in india. other efforts would facilitate the transmission of electricity from central asia to afghanistan, pakistan and construction of new projects would create thousands of jobs across the entire panorama of central asia and unlike private enterprises suppressed by the
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lack of reliable electricity. critically, the new silk road vision also includes an emphasis on the role of women. the chinese have a saying that women hold up half the sky and today's world you cannot build a modern economy when you exclude half of your human capital. fad is just one reason among many that we have pushed and emphasize women's empowerment in this region and indeed around the world. we also view it as important to include not just the immediate region, but also the wider asian and international communities, and this is reflective of the fact that central asia has always been a part of a larger asian economy. for instance throughout the region there are increasing linkages of energy, roads, trade and communication with china which has also played an historic role in this region. indeed, just recently china
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conducted and held and hosted a major meeting called the china eurasian expo. at fedex though they invited countries including russia, turkey, and many other countries in the region including india, pakistan and afghanistan in this conference. so china has long been a major player in this region and if we are going to continue to develop this idea, working with china which is moving west as part of its go west strategy, china also needs to be and will be a major player as well. we also need to include at the other end of asia, turkey which has played a stark role in the region and wants to be supportive of development in this region. now, indeed turkey has a very impressive private sector and their business association which is called the tobb emphasized to
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me on a recent visit that they want to be more involved in all the initiatives in central asia as well as other parts of the world. so this is not just in the immediate region. it will engage a wide range of other countries including china, turkey and others that i will mention in a moment. of course all these efforts cannot he come a reality overnight. but as the businessmen and women of their region find common cause across borders, economic connections can reinforce political efforts to promote regional stability. as prime minister singh recently put it so beautifully, i dream of the day when retaining our respective identities, one can have rec list in the punjab, bunch in lahore and dinner in kabul. that is how my forefathers lived and that is how i want our grandchildren to live.
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i think you could also think more broadly that you can perhaps have a greater degree of communication and transportation between hamburg and hans joe although it may take a little longer, but thinking in terms of an even broader and more extensive vision over the course of many years is another way of looking at the broader term in connecting western europe with east asia. to get to the point that we are trying to get to in terms of this greater connectivity, the afghani stem cells must knowledge that they have a lot of work to do in clarifying their own future. some progress has been made in implementing the afghan national development strategy, but progress has been slowed by policy, regulatory and legal difficulties. and the private sector has not been sufficiently engaged in the
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process. indeed, in all of our focus on the security transition, it is important to recognize indeed for afghanistan to undertake another transition from and aid dependent economy to one based on sustainable private sector led growth. so while there is a clear need for international support now, our shared vision of afghanistan's economic future is based on the fact that afghanistan, like its regional neighbors, have a lot to offer across the wide variety of sectors and their private enterprise can and must play a major role in any improvements in the economy and it must also be consulted very actively in improving the regulatory environment in the country. agriculture for and since accounts from a state% of employment in afghanistan but the sector remains largely driven by subsistence farming. significant opportunities for
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private sector led growth in private sector investment. modern systems have already been established in many places. cold storage networks can be built to support agricultural exports and that is beginning. customs processing barriers can be reduced by implementing a regional transit trade cooperation framework and that has as i mentioned has begun between pakistan, india and afghanistan. so there is progress but there needs to be a lot more using these kinds of models that i have described. light manufacturing and especially value-added agricultural products like wool, textiles and afghanistan's famed carpets can serve as a second source of growth. local production can be modernized, including as the small and medium-sized enterprise level by managing the regulatory burden of these firms and working with the afghan
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financial sector to make reliable financing available. infrastructure, even if it is not elaborate, can play an important role in expanding trade and commerce in allowing new product producers of goods and services including small and medium-sized enterprises, for instance small shops and local distribution networks and local companies that sell goods and services and move goods around the country, can be better integrated into the economy and they can be in many cases the big job producers that result from a greater degree of infrastructure. it doesn't all need to be modern highways. we use existing highways for greater communication and more transportation. a lot a lot of smaller industries and smaller businesses can spring up. indeed in our own country the construction of canals railways and roads played a similar role in the development of the
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american economy. and starting immediately, afghanistan must take the steps required to develop the -- not only these infrastructure industries but it also has enormous potential in the extractive industries which in turn can be helpful in supporting the communications and transportation networks that i have been describing. as you you are all very much aware the u.s. geological survey has verified that afghanistan sits on top of at least $1 trillion worth of mineral wealth including iron, copper, gold, rare earth elements and others. some of these deposits are at the the under development in many more will be soon. the copper and iron ore mines could enter into production as soon as 2016 and according to world bank projections, they could each create 90,000 jobs and up to $500 million in annual
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revenue for the government when they are fully developed. the afghans have a lot of hard work to do to fully benefit from this potential and i applaud their focus on transparency and the need to establish systems to protect afghanistan from what the comp and -- has come to be known as the resource curse. however it is very important that corruption he reduced through initiatives that increase transparency and predictability in business operations. situations like the one that arose at kabul bank cannot he allowed to occur. land rights need to be defined and investor protections must be put in place. and as we pursue this course, all of the plans that are being laid in and around afghanistan must fit within a realistic assessment of the availability of government resources. with governments all around the world facing enormous economic challenges, at least in most
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countries certainly the oecd countries we have to focus on the way to make this work with limited government support. so for the new silk road vision to realize its potential, it is critical that the afghan government and its neighbors take ownership of this effort. to get their their region must ultimately be responsible for facilitating the web of connections that will create a new silk road. it is particularly important in this resource scarce context that the private sector play a leading role, as i mentioned a few moments ago in the region must be highly proactive and reaching out to the private sector and addressing those barriers that could scare off investors. many industries can be involved. opportunities for-profit potential are plentiful. export credit authorities and the industrialized countries and development financial institution such as the world bank and the asian development
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bank can also be very helpful but of course government resources will still need to be involved and will need to play some kind of role as well. that must start with a solid commitment to the transition plan agreed by afghanistan and our nato allies last november in lisbon whereby afghanistan holds the lead responsibility for its own security by the end of 2014. the international conference on afghanistan in bonn germany this december will not need a donors' conference but we hope that the international community will be ready to make a political commitment to reinvest a portion of the savings from their declining security presence, the so-called transition dividend, back into afghanistan on top of existing commitments. for our part, the united states is negotiating a strategic partnership framework that will signal our long-term commitment to the afghan people through
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2014 and beyond. nato has already made an enduring partnership with afghanistan that committed to supporting afghan security institutions after 2014. other countries and organizations are considering similar gestures of enduring commitment to afghanistan. in closing i just want to reiterate what is at stake are go for america, for afghanistan, for the region and indeed for the entire global community. we must not forget that this effort is about ringing lasting peace to a country that has spent much of the past three decades at war. for countries like america that have lost many of brave young men and women and spend billions and billions of dollars in afghanistan over the past decade, it is important to know that continued investments are putting afghanistan on the path
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to sustainable self-sufficiency. we cannot forget that as history has vividly shown us, simply abandoning afghanistan could potentially have terrible consequences for this country, for the region and indeed for the broader global security. but i also want to remind his audience and of course i know this audience hardly needs any reminding, of all the potential that also exists in this region. over the last several decades many countries in many regions of the world have been able to build dynamic arose -- growth and opportunity for their people, not just china and india which are all this but also south korea and malaysia, brazil and turkey and so many more countries have emerged from poverty and from periods of economic weakness. hundreds and hundreds of millions of people in these countries and others have been lifted out of poverty and this region can follow in their footsteps.
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the people of afghanistan and the entire region have enormous talent. the reintegration of afghanistan into this region and into the global economy can be of tremendous benefit not just to afghani's themselves, but also to the neighboring peoples throughout the region. and to the global community. over the long run it will be millions and millions more men and women working in the great areas of progress that can be produced by bringing the afghani's and others more actively into the global economy in terms of scientific achievement, medical breakthroughs and other kinds of economic it to the these. it will mean increased hope and security for generations to come. that is the vision we have been sacrificing for and that is the vision to which our commitment in doors. i want to thank you for your attention and i just want to say particularly to the minister that there is enormous support in this country for the kind of vision that you have outlined,
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the kind of very hard work that you and your people in your government are doing and we see implementing this vision is good for afghanistan, good for the region, good for the entire continent and certainly a very powerful benefit to the world. now it is up to us, all of us, to implement this new plan to help the afghani people to realize their potential and in so doing afghanistan will benefit and so will we all. thank you very much. [applause] >> finally, for 10 years, the asian development bank in central asia regional economic cooperation program has been pursuing the development of continents expanding east-west transport routes. here to speak of this very important work is mr. juan
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miranda, director general of the central and west asian departments at adp and with a lot of experience in both private banking and his native spain and elsewhere in europe and a seasoned professional in the world of international finance. and development, he has the right one to speak on this topic. juan miranda. [applause] >> good afternoon everyone. thank you for inviting me and inviting us, and thank you minister speaking from delhi in our offices and secretary hormats. i enjoyed both presentation very much. they were well-structured. they were good. so what i will do is not read the presentation which i had but
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to show slides that i produce and to share with you a few observations and then maybe have time to change notes with the audience here. i thank you very much again for the invitation. now one of the messages i want to convey to you, the first one is to convince you, and i'm sure that you are, but i will try anyway just in case because i don't want to run any risk. the regional cooperation matters and it matters a lot in this part of the world. ..
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it is crucial we have crucial things coming up very shortly, particularly in 2014. my third point that i will share with you is that with doing many of the projects we have to do, none of them are complete. the job is not done and we have to finish it. otherwise, we don't have the means to an end. my fourth point -- message will be to sit just how we can move now from a division to putting this project together. the ones that have not been done or the one that had been finished. and in that context, i will make some suggestions for all of us in here today. let me start with the first
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first, why regional cooperation and wide region. first of all, we know, we heard because we know it thought why with a few exceptions then we have to convert than loughner's into family nurse. why is this important? because it is in between large commercial centers, not supermarkets, but clients in the east and west and of course in the south. and unless we develop a comic judy to make things have been, there is no way that this region without the benefit, but there is no way this region will get out of poverty, which is something we need because it's in everybody's interest. the nearest port, a lot of countries in a region is about
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2000 kilometers away. how can he compete if you have anything to sell unless he has access to the places in between. an important one is getting on the way to develop at 8%, 9% growth over the past two years needs access. unless we have that access, investment, competitiveness, productivity ain't going to be there. those are some of the reasons why this makes sense. what other things make sense? the logistics of the place they are lying in and also the things they have to sell. so it's not just a conduit for east-west trade and for north-south. it is also because we have minerals. we have commodities that we need both in the south, in east and west.
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we can't do without. what is the significance of all this in relation to afghanistan? very simple. the significance address he said quote, unquote, afghanistan is a place in between. you have things that you can sell and will talk about some of those than a minute, but it has sold for the rich, the markets and in particular to access the ports in pakistan to crack she and this is good to reach markets in those places, but also important to reach markets elsewhere. either way, pakistan has become the 10th member of a regional economic cooperation program, the so-called eric and this gives us a new opportunity. an opportunity for all. so the system of the reasons for the work that we do in the work that has been proposed here today by both the secretary
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hormats. in other messages that we believe in without practicing in doing so for 10 years for care at. herod is a voluntary arrangement. it has no treatments. it has 10 countries and he has a very practical approach, which is to focus on projects that deliver infrastructure, deliver products both for the domestic market and for exports. and it's been going well. we invested over the past 10 years close to about maybe $16 billion in different projects. and we, the world bank and others, particularly the countries in the neighborhood have done a lot of that investment themselves with contribution to the finance. i may talk a little bit about my second message, which is about the new silk road initiative. what we like about it and why do you think is both appropriate? we like about it the fact that
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it focuses homes in on the core problem and it is the sovereignty of the economy today impose 2014. and what does that mean? it means the one the troops that are out in economic activity that is related to in this town. we do have something to replace it, to create jobs, income and hope for retail. and if we tell, we don't have a situation there that provides benefits, probably has a situation that provides all the others. so the economic sovereignty is in question and the initiative focuses on the problem first and foremost, but we like it because it talks about the solution. if a solution that has two critical components. one, infrastructure as a means to an end into common in the regional dimension. it's not quite like the effort
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of the statement of this defense making airplane for me ask you to a gas mask on your first before putting it on the little ones. and distinguish between what is big and small, but he means that i must be sorted out a common activity in the central asian countries, we're not going to be able to do very much for afghanistan to become a connect their coming to become a conduit for others. so we do have to start about that. original dimension not only because they want to get to points, but then get us to markets, but because those are the things that need connectivity in order to be good for you. in fact, when afghanistan was negotiating with pakistan the cross-border trade agreement, one of the key messages and perhaps maybe not a driver for getting it done, but certainly a message that will drill down and can be very clearly to other
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parties that afghanistan can bring not only afghan products, but it can bring the whole central asia to pakistan and beyond. i hope that was one of the factors that continued the end, but we like the projects and regional dimension and we like that as part of the solution. we like it so much that we've been doing it for 10 years. we've invested in afghanistan alone, close to $1 billion with almost the same amount they will tell you on what's in a few minutes. so the message, it is a good initiative because it talks about a vision again, it repackages the message, to me that well, clearly. i was talking about the problem and solution in a cause for projects. projects is something we have two kerrick. characters a platform to getting that job. most of the jobs we talk about today in the initiative, but in
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fact also in the program and while not competing here at the initiative simply states that they make sense for that period of time. buddy make another point. if it is the fact that minerals and hydrocarbons are a means to nine, the infrastructure will be a means to that particular means. and in this case and in this point, i like to acknowledge the excellent work of the task force business instability cooperations hear from the u.s. has been driven this country. they are trying to place while helping others place public assets of the private sector, to 19 and hydrocarbons that is absolutely fundamental for those jobs demand in coming years years to come. it focuses on three things. 3.5 perhaps. one is transport, conductivity,
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and that the mail. the second one is energy, the various parts of it including trading with other countries in the region. the fourth one is trade facilitation, getting most cross-border agreements time. in the fourth one or the half his knowledge, sharing experiences not only on a regional cooperation but particularly on the role of the year and the things that go with it. once again what undersecretary hormats said, women in that particular development. otherwise we will get inclusive growth. now, let me come back to some challenges and then i'll finish with a proposal on the initiative itself. to get things done in afghanistan, we have to take into account now, but also in the future that security will matter. it's going to be huge problem to attract investors and investment and it's not easy. it's not easy today. it won't be easy tomorrow, but at least we acknowledge that it's going to be part of putting
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projects together. the second point is that we need to develop the nonbinding, the non-hydrocarbon sectors as well because those come as important as they are come with billions of dollars of resource, untouched as they are come if they will not be -- we cannot make ends meet without a transition in between. i'm not probably takes us to what some manufacturing and other services. so we can forget about that. and that is not yet been finished. at least the job hasn't been done. the third point is that we need finance. we must not and cannot have unfunded mandate. and it's okay to name the projects than we do. we are also asking for us to make sure that we have the money to back it up. now the private sector will have to raise the funds to build the big projects, mining and hydrocarbons, but we also have to raise money for facilitating
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infrastructure through various vendors that we have available, whether it's the asian development or special transcends unless the job is funded, it ain't going to happen. so we have to think about that it is surely a challenge. the institutional makeup in afghanistan needs to be strained and because back to provides credibility and credibility basically allows the private or another's to mention the risks are meant to operate within that sphere unless we have that fixed, we are going to have some difficulties to attracting investment and the investors. and finally another challenge, maybe not the only one, reforms are about the ambience for doing business in these countries. we are short. we have got a number of areas in the sky to fix them.
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so with this work in progress, i also add that if the original dimension elsewhere, that things happen in the rest of central asia, then the possibilities, the opportunities for business in afghanistan will also be impaired. the mitac and about the initiative. i think that what he means is that continue a strong messaging, a strong outreach. it does no harm at all to put what it is and to put it to others so that we focus around the important than the essence of having economic sovereignty in this country in years to come. but we need to focus. we can't spread it too much. we have to convert into an action plan. as we do that, we have to do prioritization. we've got to define what is first, second and third. it won't kill to do it all. remember that we have long-term
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projects, but we've got to pay for the short-term ones first. let me add the third point, which i alluded too early on. we need other sectors like agriculture and manufacture to be in place. and the fourth one -- the fourth point is that we need constant agency alignment among both here in the united states, but also with other donors and multilateral banks. if are not on the same page, will be talking different language. and that will do good to no one. but that message in my view is important because the job is not easy. let's not make it more difficult by not being together and turns that the priorities in the way forward is. if it problem is how to play for the long-term projects with the private sector. and i've highlighted the job that it's been done for the support provided by the task force with the department of defense, we need to professionalize the weight the assets have placed and we need
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to probably find ways to underwrite or minimize some of the risk that those investments do indeed take place. i also believe we need the platform to execute projects. it is not easy to prepare investment plans for projects particularly in the railway, the public sector projects at the private sector isn't going to do. and so we've got to go to places that have been practicing, but i've been doing the job against the times. it takes time and takes money to prepare an electricity system operation. so we need following from that, dollars. we can't do the job without financing and i've highlighted earlier on the essence of mandates. there is a need for leadership. and finally, for always bearing
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in mind, taking into account the original dimension matters constantly doing the job in afghanistan. so what is my proposal? my proposal is that we moved the initiative to an action plan into shortcoming medium and long-term projects. that we surrounded the enablers, things that must have been for us to have been properly and on time and that would leverage on existing programs, including kerrick. the way of clear, unequivocally clear financing plans that would bring in the reforms for doing business within the country of, that we align ourselves and we talk about it time and time again. that is part of the outreach and that's what the initiative has given us. what a way to? and what can we offer to this
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endeavor. number one, we have a platform. it's a platform with experience, with a track record, with an honest reputation. we can make it available to others in particularly projects like this. however, it doesn't come cheap and you give us a freelance. we will not do any freelances at this because we had our amendment to trying to convince the donor community that putting money into afghanistan, which is one of our most important hindsight now and rightly so needs cash. the only cache we can put in this country is grants because they are not able to borrow. not yet. and to do this, we have to galvanize the international community for the same purpose. otherwise we will not succeed. we have an afghanistan
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infrastructure found in the making. we haven't yet we haven't yet we haven't yet rhodin because it takes time to do so. if we look down and we look ahead toward building the green road, which is absolutely essential to compete the growth network, to build the railways, we've only done phase one of three types of faces for projects to complete the energy projects, including games that we will need millions and millions of dollars. so let me conclude. i represent in my house and therefore my house is not night, but is the house where we think the initiative is good. we think it's timely. we also think that it needs to shift into action planning a period i believe that it is compatible with current program, including kerrick and i know and therefore i say that adb is a
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good partner for both the united states and other donors than i am here to say to all of us, to say to you, let's get down to work. thank you. [applause] >> thank you very much. and all three of our speakers. the floor is open for just a few minutes of questions. we are happy that you're able to stay with us. thank you so much. and mr. miranda is also here available. >> yeah, leif grossberg or, economic adviser done at centcom. we've heard about the importance of afghanistan getting on with all its neighbors. we have heard much about every. iran is a big neighbor of afghanistan. afghanistan has economic interests and good relations with iran at the same time, the united states has problems with
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iran. it's certainly an understatement. how do we reconcile these competing national interests? >> who wants to address that? [laughter] who wants to own it? yes. >> i should have welcomed many other people, and the investors they react in this area. former ambassador from afghanistan here, but is there anyone from ulster and the u.s. government that can speak to this? [laughter] >> well, sir [inaudible] >> the energy source is coming to brisbane built, pipelines are being built. what is already at the iran border and meanwhile the exemption up or down the hills
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began to push. >> if i could just make a quick note with regard to iran, very interesting. two quick note. first, the iranians and the pakistanis have both built ports as you know very well. kandahar and childish heart and the u.s. has been, as i observed as nonmember of the government has spent quite content of a lot of traffic coming and from central asia. further to the west down to chow bar, the virtue which was built by india from afghanistan. now, apparent as it also wishes to go east. but the u.s. hasn't taken a stand on not as far as i'm aware. second, the road north, one of the roads north coast or
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tajikistan. the u.s. built the bridge over the punch river. you take the right route up through the 10 years and over tacoma past and to send john. you are taking a road that was built by china. if you take the route north, you are taking a road to bridges and tunnels of which were built by iran. there is a case of clear collaboration that i would never, ever acknowledge. server. >> guesstimate thank you. bob kalina ase investments. question, you talk about this afghanistan infrastructure fund. what do you envision to be a hurdle rate that would be appropriate for that and secondly, are there industries that do not allow control investments and the lake they are in terms of this going forward? >> thank you.
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>> if i could first of all make an observation about iran and china. we are not and i hate to name iran and their and i still want my bacon can't open at the end of this meeting, but we do build the roads up in the north end of railways will go through have wrought i am not going to suffer to get into whatever port those products want to go to. we have other issues with iran. conductivity should be one of them and i have heard that it is. it is however the plant because it looks attract this, looks economically right. i'm sure it would be for the private operators to go down to karachi and ported them. those two are competitive sports and i don't see any contradiction in that sense. that leaves the network goes around the country and it would become whatever is more
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convenient for the operators. if it happens to be pakistan would be, if it happens to be other ports, so be it. as far as china is concerned, remember it's not just about dragons here. it's about competition. we have had the empires before an afghanistan now is no longer a cushion. it shouldn't be. it should be a conduit. and what we do and what we should say is a not then back off petition. we had those mandates that both the u.s. and others are trying to put together. but the best guy come in and take them. and it's pretty good at the east-west trade makes sense. it totally justifies the corridors of building and investing in him another south corridors that make hopefully just as much in places like india, southeast asia in general with trillions of dollars in trade potential would be a really good thing to happen. about the afghanistan infrastructure fund this
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concerned, if the private sector one and they put the money together turn a company or many, but we are doing so from primarily the public sector. the reasons for this is when we went to projects, public sector projects, we can charge money for them. i know it sounds great. you and i couldn't benefit from that, but afghanistan does. and that's because as the instability problems. so we don't have that in play. as far as the questioning and may be the answer on what is possible and not possible in the hydrocarbon sector, i'm sure that our colleagues here from the u.s., from the task force could probably give you with that. at least the way understood the question. >> i wonder if i could turn to michael stanley from the world bank who has devoted more time than anyone in the room i suspect to the problem of
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mineral =tranfour and markets and minerals. can you provide a comment on this? >> a daylong topic. thank you. i did have a comment. i think one just said it so i'll just parrot what he said. these are commercial commodities going to global markets. at the end of the date they will dictate what direction the commodities will slow. within that there are technical barriers, using iron ore is an example. if the bulk commodity. some ports are not bulk commodity course. so i karachi port is not. there are others in the region that are like that. so it's a little bit difficult for us to set today and try and engineer and direct something that at the end of the day the markets will tell us. and so i think -- i think we are all on the same page and i think we are all in alignment with the bank is reading the resource
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coordinator initiative which is in response to the adb's program in the silk road initiative. what we are proposing from our site is to just improve coordination and dialogue among the donors in the commercial market and to reach out now and have these conversations with the global market people. what do they need? and get more pull from the demand side and was pushed from supply-side. so maybe i'll stop i'm not in others can react in a statement. >> thank you very much. just please, sir. please stand. >> my name is mohammed. i don't know whom to ask this question about security. this existed in the time that ground realities of today, especially a security. so what the security issue facing today is that we're talking a security issue which is not in control of anyone.
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>> mr. bathija, we can turn to you on that. >> at the dawn i think, right? well, thank you very much. let me take this opportunity to thank mr. miranda and to provide just that his ability to communicate with each other from this corner of the world to you. thank you. the question of security i need much to elaborate except one small sentence. we have to start somewhere, whether it's a reasonable security or whether it's another security. the opportunity which we bring to westmont pa security and that may be one way to look at it and
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therefore i believe in it. other race will be staying for the next century to create a security, to expect 100%. there's no such thing. we are working on it. i think the world has seen very well that our forces will be taking in 2014 with the help of our donors, particularly the united states are getting very much ready for it and i hope by the time the silk road initiative comes into full blown, we should be in good shape. >> let me follow this up if i may, theriot, with the following question: are you suggesting that these activities should be done very on them? for security and then development? or are you suggesting the possibility that they could become simultaneous and mutually
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reinforced? >> thank you. they take your second card. it has to be done hand-in-hand because i believe whatever activity is taking place as result into some sort of creating a proper security. so i take the second part of what she said in fully agree with you on that. >> can i ask ms. veranda to comment on the same thing? >> at happy to do that. but let's not make it abstract. we both close to 1000 kilometers of roads in afghanistan. and we've been doing so so far i don't have any words attached i can tell you without any problems of any problems of significance. we built the transition land that takes electricity 24/7 to everyone in the city of kabul.
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four years ago we had about two hours of electricity supply in that city. today we have 24 hours. and this is about any other problem. we just built the railway line to massage every. we did so in record time. the project was supposed to take three years. we negotiated for a wide and the contractor finished it in nine months. there is no project in recent time that has been done as fast and i may say as well as this particular one. in the history of add, for other countries that we have and this is in afghanistan. so what do we do? we work with the ministry of interior. so when we say that we transition and pass responsibility to the ministries, we actually does what we are talking about here.
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so we have a lot of people that we put in there. and yes we have to finance it and yes, the cast aside, but it's necessary so we do. we have been without in the future. the next railway lines were required maybe two dozen people at the brick road with just in a word to contract to an american firm, they'll probably need two or 3000 people there. we are not using private contractors. we rightly so think that is an appropriate do in this country now. forgetting the job done despite this problem. >> a railroad from pirate time was built right they are. they are labor costs are a little less than ours. why are we contracting -- where
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you contract and with an american firm probably six or eight times the cost? is that a political decision or is it a principled decision? i don't understand. >> it was political -- >> or people or issue that know how to build roads in tajikistan. >> the greenberg contract with dugout and the american group of joint with the turkish one answer they put a deal in front of us. use back -- the railway operation was done with the news that company because among other things were using the north gauge system. we think it makes sense because it's both efficient and cheaper mark perspective, from the government's perspective and because much of that trade will come from the north shifting down. so why use any other system? but even in the border between iran and herat come in the line
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being put together will follow that particular system because there's always certain pressure that one of the country supporting the finance of their own system. but we will end up with is probably three or four if we don't take care of it. and that's something we're not prepared to go into. so why use that? well, they were competitive. they were. they did it well. and of course, just make sure we also verified with a very good engineer outside the quality was not compromised. we have three criteria to get the job done. the budget, the time and the quality. and they performed exceptionally well on all fronts. i have to say. >> thanks, fred. i want to address the security question. and the insight i got it this
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was the studies we did on the northern distribution network from the transit quarters into afghanistan and the labor they won off in my head when i learned that, you know, these transit orders are bringing in nonlethal good. until the opening of the new transit quarters from the north, everything less to the point of karachi and up through the shaman case, going virtually through enemy territory. and the loss of a was less than one half of 1%. these are not military commonplace. these are shipped by commercial carriers. nonlethal goods. they had a loss rate due to filters blowing up or whatever. less than found in new jersey. that was quite amazing for me to realize. >> this is not a comment on the possible candidacy?
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>> nothing against new jersey. >> some of my best friends are from new jersey. but it was quite a stunning to realize and of course we think, how do you explain this? i mean, the major explanation is that there are people that are making money and it's facilitating the transit and trade. and that was one of the insights that let us to think about what we learned from that project for trade and transit strategy for afghanistan. >> thank you very much. they even john, i wish we had more time. we are out. how to think our three speakers, mr. bathija, it's really wonderful you could arrange to take this time and of course, robert had to take off.
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of course my good friend juan miranda. this is obviously at the beginning of a very serious discussion. the questions that we have to face and face the horror, is this all coming to a quick visit to little? can it get the job? is this a realizable goal? or is it a naïve dream? these have to be face. how do you engage the private sector. juan miranda is done by bureaucratic organizations. finally, above all, how will the government of afghanistan and businesses in afghanistan leadership in afghanistan continue their engagement were they've after all been the pioneers of this and the years
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to come us in the changing environment in which the country assumption. so obvious and many many other -- much more plentiful questions i'll have to be addressed, we hope, to be one of the settings in which that might occur. thank you very much for coming. [applause] [inaudible conversations] >> less than a year after dia's creation, it faced its first great test when the cuban missile crisis brought the world to the edge of war.
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>> in a few moments, more about the future of the postal service and the head of the postal workers union
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>> the head of the american association of university professors says that tenure and academic freedom are in jeopardy and need to be. >> tenure creates an atmosphere on campus, where people can speak freely, not just in a teaching, but also in terms of university governance. if you don't like a proposal to board of trustees or president makes come you have to be able to speak freely about it. administrators should be able to do that as well. so that shared governance speech as part of what academic freedom protects. without company really don't have the expertise of the faculty available to you.
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>> this is a dangerous time for britain and a dangerous time for britain's economy. the governments are failing. you can sense the fear people have and we watched the economic crisis that stocks our country in 2008, threatened to return. >> more now on the future of the postal service. our guest on "washington journal" is the head of the postal workers union. this is 45 minutes. >> host: we are back with cliff guffey, from the afl-cio here to talk about the future of
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let'post office, u.s. postal service. let's begin with how many union workers you represent.. >> guest: we represent approximately 220,000. we have 250 some thousand in about two dozen active right no. we represent the clerks that word for windows, that sort the mail, the drivers, the mechanics, and the maintenance employees. host: there is a lot of debate about the future of the postal service. congressman darrell issa has legislation to reform it. senator john mccain has introduced a companion legislation similar to that legislation. are you willing to make concessions, and what are they? guest: we just went to negotiations and made a lot of compromises. representative lynch has a bill in congress which has 220 code-
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sponsors, -- co-sponsors, which will reform the post office. on the other side, senator carpenter has introduced legislation that would support the postal service. john mccain's rubberstamp of darrell issa's bill will help destroy the post office and layoff toyota thousand people. host: what are the concessions so far? guest: week relaxed rules on flexibility so the postal service -- the post office could be open longer. there would be no legacy costs. we recognize it is in flux, in transition to a whole new world. we started out with lower level tried our best to
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meet their needs. over the last three years, 100,000 jobs have been removed from our workforce. we have done it without laying off people. we thought that was important to go forward with that. there are many people eligible to retire, and they do not need to be laid off. in darrell issa's bill, he says if you have reached the age of 55, if you are ready to retire or not, you must retire. that is age discrimination, and those things are not acceptable. host: what about how the pension system works? guest: there are three areas of concern here about pensions. the postal service pension plan, which is paid through by postage revenue has placed 285 billion dollars into the pension plans.
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the first has $90 billion in debt. there is no question that there is $6.9 billion to much. postage has input into this fund. that is plenty of money to take care of the pension. in the service retirement plan, there is $195 billion there in which all of these actuaries from the office of the inspector general had said there is between $50,000,000,000.69 $5 billion too much in that fund. we're not saying to give that back, but to shifted to other things in the deficit. what the postal service is doing right now, it is like someone buys a car, and had 36 months to
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buy the car, and you pay it out in defense, the government says you have paid in advance, but keep making your patience. that is a tragedy. into thousands the key to making your payments. that is a tragedy. in 2006, there arose a requirement to refund health insurance payment premiums in 10 years. in the same law, they said you cannot pass that on to the rate payers. if you have a non-profit organization and to not have money to sit on, and the price of gas and everything goes up, and you can only raise your price of stamps, what is going to happen with that? they will go down by $5.5 billion a year. host: why do we need a non- profit organization to deliver mail in this country where we
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have fedex and other private carriers that do the job for profit? guest: they did not go to every door in the united states. we go to 100% six days a week. we deliver 25% of their mail. in other words, they do not take the trucks to the rural areas. they can take the mail over the counter because the cutbacks does not allow us to leave post- gulf with -- post offices open past 5:00. host:, darrell issa was on the show. he had comments about the postal union. guest: who would not be willing to be in a pension plan that essentially we pay later if we stay in business? more importantly, he is right. this is the only agency to do this, because this is an agency
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that is allowed to get its own revenue, said its own benefits, which are higher than the rest of the federal workforce cut and an agency that was at independence, we want them to have it. it is a business unit and that is simply not making a profit, and it is primarily because they have not made the changes they need in how they do business, and how many people work there. it is not they cannot make a profit. it is not that they are paid too much. there are too many workers, and they know it. host: cliff guffey, to many postal workers? guest: i think anybody that goes to a window and stands in line knows there are not too many. there has so much drain on postal revenues to subsidize other parts of the federal government. when you have hundreds of billions of dollars in pension retirement accounts that were not there for postal employees, they will not get it back because it would show how under-
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funded the rest of the federal government is. what they said is not true. we get the same dollar-for- dollar benefit. it is paid for only buy postage revenue. we get the same health insurance plans. the cost is the same. the post office might pay a little more for hours then what the other federal government does, but that is through negotiations. it is the same benefit. host: we're talking to the president of the postal workers union, cliff guffey, and the future of the postal service is our topic. we have a fourth line set aside for current and retired postal workers, and you call in. we will also incorporate some students. our campaign 2012 bas it is visiting a high school in
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indiana, until the next 45 minutes we will hear from 15 students participating in the program. the high school is located in northwest indiana, and over 1000 students attend. thank you for preparing the students for the call in, and comcast cable for sponsoring the visit. our first student is jesse. >> how would you suggest to financially restore the united states postal service besides cutting back employment and benefits? guest: we think it is simple. there will be a slow, gradual change in the post office that needs to be done. we recognize there are people that will not use the post office and probably never use it again, but there is $65 billion of revenue by people that are utilizing the postal service. they should be done gradually.
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they should be done humanely, was consideration of the poor communities and rural areas, so they did not lose their service. that could be done by using these over-funding, the money been dreame that is the humane way of doing this. you have to remember, if you read a post office with two hundred or 300 employees, it does not just that those employees. it affects their families, the businesses around the post office. the post office is the core of a $1 trillion economy, and 0.8 million other people, and as these offices close, a lot of people will be effected. host: it is from james, a postal
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worker in lafayette, indiana. caller: the $5.5 billion, is that for the civil service employees only, or for all the civil service people that are retired to route the government? guest: the $5.5 billion, which is the of the deposit -- which is the yearly deposit into their retirement, that is for everyone. they are funding it all for 75 years. we would like to see a recalculation. if we're going to be the only agency to refund all of that, we would like to see that amateur rise over 30 years. the problem that we have right now is a set the bill based on 700,000 employees. we're down to 500,000 now, and as they lay off another 120,000, and the people that they layoff will not retire, and
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not the benefits, who gets that money? it just becomes revenue the federal government has to spend another bridges to know where. host: let's go back to our campaign 2012 bus. taylor is next. go ahead. >> good morning. what are the possible causes of the financial losses to the postal service? guest: there are a lot of things playing into it. the internet plays into it some. people did not communicate in hard copy. when i was in vietnam, i love getting letters from home. today, people in the war zone can open up their laptop and talk to their families through the internet. communication style is changing, but still, there is a
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lot of this nation that relies on getting their drugs, their medicine through the mail, checks and various other things. advertising to the community is still a hard copy item. most believe the best way to advertise is putting something in the hands of the consumer. host: i want to show you what the postmaster general have to say when he was on this program about the negotiations with unions and how that came about. guest: we have talked to unions. there are opportunities with overtime reduction and other things. you could create opportunities to boost people off of the roles and irresponsible way. >> will this have an impact on the union negotiations?
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guest: there is always discussions. we have to go unions in negotiations and won in arbitration. any time, especially with the economic situations we are facing, that has to be taken into consideration when we sit down with unions. host: cliff guffey, what is your reaction? guest: it is trooper we work very closely. we entered negotiations -- it is true. we work very closely. he has three unions he is negotiating with. dohink they will work iand their part in saving the postal service. it is in no one's interest to destroy the companies that is feeding their families. we try our best to work for the postal service, and i'm sure the other unions will, too. there are things that should not be focused on the postal service, when we can resolve our problems ourselves.
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host: a postal worker himself, in indiana. caller: i want to make a quick comment darrell issa is not our friend. love him, but he is not our friend. mr. cliff guffey, make sure you tell everybody out there that the post office is the way to go. we beat the price at ups, and sex. and, when it is snowing outside, the post office is the only one moving around. host: have you been participating in the protest around the country? caller: yes, ma'am. i have. i love it. remember, this is not a bailout. this is our money, and we want congress to take that money and give us access to it so we can help the post office. it is not a bailout.
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we did not ask for tax money from the american people. it is our money. host: cliff guffey? guest: i appreciate you calling in. u.s. the but the demonstrations, we have -- you asked about the demonstrations. we just had demonstrations across this country. we feel like the average is around 50,000 people. that is postal workers testing congressman for help. -- asking congressman for help. i would not say any congressman is not our friend. some support us more than others. i do not like to get into partisanship. i hope the government and the congress can set aside differences and solve the problem, not with a bill, but the name means that would allow the postal service to -- not with a belt, but it means that
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would allow the postal service to survive. host: matt has this tweet. can i guess, and why he thinks this pre funding and it applied to the u.s. postal service, does this apply to other agencies? guest: i can only speculate because i was not in the room with the gentleman, but anytime you say you cannot raise the rates to pay for something and put an additional $5.5 billion on their, you are setting up somebody to fail. what this did, for less six years, it cause the post office to go down by least $5.5 billion. without that, they would have been in the black. we have been struggling to we've had a lot of problems, but we would be meeting those problems. host: how would you need pension responsibilities? guest: well, the pensions are there. they're being paid for separately. this is an additional $5.5
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billion for future retiree health costs. host: how would you meet that? guest: how does any other country -- company in the world make it? host: sometimes they did not. guest: for health care, and they do not. host: some look at the auto makers and say that is part of the reason. guest: all of that has been paid back. host: right, but it was because of health care. guest: we already have a future retiree health care insurance fund -- almost $40 billion. about 40 or 60% of that, any private company who does that is usually only financed by about 30%. so, we are overfunded there also.
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we are not saying do not contribute to it, but stretching out over 30, 35 years. they talk about is the post office sales. the post office owns $50 billion worth of property in this country that could be sold to pay off things in the future. host: you would agree with that? guest: at some point, they should sell off. taxpayers should not pick it up. host: good morning, ron. caller: what steps are they taking to revitalize the postal service on a local level? guest: we have tried our best to provide lower-cost employees, provide flexibility, maintain offices, and keep offices open
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longer. we are given post offices the right to have flexible schedules. if somebody is working eight- five, they could be scheduled eight-seven, and work less days a week, so they can keep the post office open without having to pay overtime. we have done everything to help generate more revenue. there are a lot of situations out there were a lot of union rules forced the post office to contract out work. i will give you an example. driving a truck from oklahoma city, to dallas, and back, would require at least 10 hours. if the work day is eight hours, if we could not do it, the contractor could charge whatever they wanted to. we say we will waive those rules, provide lower-cost. the post office could then save money by doing it internally.
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instead of contracting it out, they could do it now internally without having the additional costs. host: are those ways to not only save money, but increase revenue? guest: sure. my office in washington, d.c., is one block away, in one of the hearts of the downtown area were a lot of lawyers takes things. we close at 5:00. and ups are open to it. this talk about putting them beyond a -- putting them into a grocery store. that is the way to build your business, drive people to other customers. host: there are ideas to allow advertising on the side of
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postal trucks. do you think that is a good idea? guest: it depends on the type of advertising. if it is family-friendly -- i do not want to see budweiser on the side of the truck. the post office in small communities is where the flag flies. there should be other government services put into the postal service. i am a disabled veteran. i could get a lot of my benefits -- checked my benefits online. to further access greater depth, i must go to a va facility, which could be 150 miles from home, and i had to go three times. if you could do that a post office, why not? verification that you are who you say you are. host: consolidate services? guest: consulted government services.
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host: in rural areas? guest: in all areas. there is no reason it could not work in large cities. we have a position that could benefit the country more if we were allowed to do services that our hands are tied, preventing us from doing right now. host: california, you're on the air with cliff guffey. caller: this is unbelievable. in 2006, george bush and his cronies decide to destroy the one industry that has been sustainable on its own without taxpayer money, and all of the sudden, you are seeing that the post office has to many employees. are you serious? the republican government is
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crippling this country, and taking everything from the american people. they are stealing your benefits. they are stealing billions of dollars. that helps them with their war chest. i cannot believe it. i thought it was all about e- mail and facebook and twitter, the reason the post office was going bad, but it is because of george bush? host: cliff guffey? guest: it is a shame, but there are people in government that do not want government to work. they want government to fail, and the postal service has been an entity since 1970. for 36 years, the employees salaries went up at the rate of inflation, and a product that we postage was about 10 cents and newspapers were about 10 cents. newspapers about 25 and posted
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about 25 today it's about 44 cents. newspapers are a dollar or $1.50. newspapers are a great buy. we stayed well below inflation. fix006 someone said let's that. they fixed it by putting in provisions that would destroy it and make the postal service look bad. that's what happened. >> one of our 15 students aboard are 2012 bus in indiana at the high school. go ahead, steve. caller: good morning. do you feel the u.s. postal service needs to be more concerned about saving jobs or saving money at this point? guest: i dig they can do both. there are ways to streamline the system without causing the system to collapse. if you move too fast in a changing world, you can eviscerate the need for your service. when you start closing plants
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and delaying the male, then that causes people to look for other ways to get their product delivered or what have you. to stay competitive, they cannot close down their network. in other words, you don't take care of a medical problem on your ear by cutting off your leg. you cannot do as large a surgery on this type of institution as fast as some people wanted to happen without destroying the service. that is widespre what a lot of s debate is about, how to gradually take this down to meet the needs of society as they decreased. do you do it quickly right now or do you do it over a longer term? by doing it over longer-term would not cost the taxpayers any more. it would do nothing except the
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postage money that has come in through posted sales that were put into the postal service to provide this service to be used for that service and not to be used for other government services. host: we have a postal worker in houston texas, you are on the air. caller: hello. what's been going on for a long time is detractors of the postal service have been trying to do sabotages it. every industrial nation where they privatized postal service, the rates have gone up and the service has gone down and no one is happy with their postal department anymore. this misinformation that they are calling ethis a bailout, this is a scary propaganda when they are not telling the troops and trying to predict not .elling the truth an
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guest: i would love to compare our postal service to the german postal. equivalent. germany has contracted out all their stations and branches recently, all the retail product. they have a system in germany where they have a great rail network, a whole country is crisscrossed by rails. they don't have to put mail on airplanes like we do in this country. it travels in a steeper manner across the country. they have socialized medicine in their country, so their s goals of this is not have to make big deposits. but their postage is 22 cents more than ours. you are correct. when you talk about the taxpayer bailout in this country, if they get to the point where a lot of this is likely going, where they would like to contract out huge portions of their country, people will think that is profitable, we will do that,
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someone will make a lot of money. but then who would deliver the mail to the small rural areas and poor communities? that would be done by government again and funded by taxpayers. while the post office cannot make a profit overall, they used high-volume revenue areas to pay for a new low volume areas. prepare try to do is do away with low volume areas which would hurt people in rural communities, or they want to contract out to work in large areas, which will hurt their rural communities. it is a node installation if you go down the road of some of these congressional bills just to destroy the post office. it is an american service for the american people and has to be universal service or its not a service at all. host: guy allen is calling from aborted campaign 2012 bus. go ahead with your question. caller: 1 and do you think it's the biggest misconception that americans have about the postal service? guest: clearly the biggest
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misconception we have in this country is that it paid for by tax dollars. it is solely run by the posted revenue that comes in, 44 cents at a time or the individual advertising mail. we started running a commercial several months ago that it's not funded by tax dollars. host:, is banned on the commercial advertising? guest: over $1 million. it was an awakening to the american public and changed the dialogue in a lot of the news media that were saying it was paid for by tax dollars. it also woke up a lot of our people. our people are dumped at all the time through the window with people saying that we pay your tax dollars, when they really don't. they don't take tax dollars. we everything for the postal service. we pay for the trucks and the gas and future pensions and
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retirement plans and health care. we pay for that out of postage. i think that is the biggest misconception out there right now. much of the american public thinks taxpayer dollars pay for the post office. host: here's an e-mail from franklin, conn. also service needs innovation, no saturday delivery. what you think about those ?ursar-- those what about eliminating saturday service? guest: we could save everything and not deliver at all. if you are a service, you are a service. it's not going to save that much money when you have overpaid pension funds by $70,000,000,000.-1589965110 and overpaid into the future retiree
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health insurance. when you overpay into all those, to say we are going to cut service to the american people to save $2 billion? if they close 3700 post offices, they will save less than a couple hundred million dollars. but they are having to cut and look at the bottom line of everything because they're being required to put this money off to the side. it's not necessary. when you are fully funded -- and they keep saying put more in there and more, there's nobody in america, that would do that with their bank or anything else. they prepay their loans and the bank said we are going to foreclose on you, it would be observed. the same people in this country if these and kind of regulations were put on any private company, they would say you cannot put these regulations on, they are the same ones and we must put these regulations on
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the post office. host: michael is a republican in michigan. caller: good morning. i am also a disabled veteran. that makes us brothers. guest: very good brothers. caller: we used to get our medication delivered by ups or fedex, as you know. we now get it through the post office. although it is probably a lot cheaper, you guys are not getting it done. i get medication -- they dish it out to 30 days at a time. you do not get it until the 30 a day or possibly the 31st day. when it does not show, is a problem. call the post office, they don't answer the phone. and when you to answer the phone, to get an attitude.
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guest: i sincerely apologize. i get my medication, of them per month, 90 day-spurts. the minute i get them this month i call nine days in advance. i have never missed one. we do recognize that there is a staffing problem on the lines, but you cannot drain the money off that goes for service and then say why is service not there? i think the postmaster general is trying his best right now to try to improve the communications and we want to work with him on making sure that the postal workers have good answers. we have people there to solve the problems. it's just not there right now because we cannot drain this kind of money out of a system and not cut service. you are talking about exactly what we want to correct. you have to have people there to
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answer the problems for people. you cannot do that with putting the cash flow somewhere else. host: daniel has sent this e- mail. guest: the issue has been addressing lately over the last number years, there's been a great reduction in the number of overhead costs. thee looking at one of things in the negotiations was we will give you lower costs employees and more flexibility, but in exchange you cannot be taking any work away from us and paying someone at another level could do. we want all that work back. responsibly bring order back and have been paid for by a working person who gets paid much less money. >> level 18, level 6, with the
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average salary? guest: level 6, around somewhere in the mid 40's. low 60's is probably 60 or 70. host: that as a supervisor? guest: correct. they say we are overpaid, but anything they can strip away from us by timekeeping and various activities, personnel work, they say we are overpaid, take it away from us. host: i want to get to another student, cody jones. caller: hello. are there any services that the post office could cut that are not useful to americans anymore that would help the post office reduce layoffs? guest: i don't know that there are any services that we are not using. there are some services they may
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have to bring back. things like -- if they go to your days of deliver door-to- door, it would have to bring back maybe special delivery, so people could get their medicines and parcels could be delivered on the sixth day. we are not advocating a reduction in any of the services. but i don't know of any services right now that are provided that should be coupled -- cut. there are some services we need an back so we can help the customers. bafta provide the service. host: frank is a postal worker in oklahoma city. caller: i would just like to say congratulations to mr. frank duffy. became a long way from oklahoma city. i think he's done an outstanding job and we need to let the public know that not all issues
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at the postal service are negotiable. thank you, sir, have a blessed day. guest: banks alike, frank. -- thanks a lot. i came up through the system? 40 years. host: joanne is a democrat in chicago. caller: i am a retired postal worker and my question is, why is our health care insurance -- it has been so high, we pay all of our premiums and it has been going up like $200 every year and the choice of insurance that they give us is high. i wonder is that because of what happened in 2006 or is that just the way it is that retirees have to give up all of their pensions
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to get health care insurance? guest: i agree. that's a tragedy the way the health care in this country, the costs have gone up 14% or 60% per year, which is reflected in the pavement for retirees and current employees -- payment. the products coming out of their tech is going up faster than their attacks are coming up -- .han their checks are they have to pay a large stock of their salary for health care. if we are working on that in different ways. the postal service has creative suggestions to maybe take us out of the federal employees health benefits plan. there are issues on medicare, getting more people -- getting more people into medicare and may be paying medicare supplemental insurance rather than all the fees. we want to do what is best for
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the workers, retired or currently working. we will be looking at working as best we can in all these areas, because there's one group of people making a lot of money and often that's the insurance companies. host: the postmaster general spoke about the pre funding retirement. >> i agree with the fact we have to move away from the retirement or pre-funding of retirement. second issue is looking forward. changing the requirement to pre- fund $5.5 billion would of been a great solution four years ago. revenues continue to go down. even if we would reduce the pre- funding and just do that, next august we're out of cash. you have to take many more steps to change what we are doing. that is why we are pushing for this option and pushing congress
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to refund overpayments we have made. retirement systems, to give us the operating cash we need to handle some of these business changes going forward. host: let's hear from our students aboard the campaign 2012 bus. zach. caller: what is your opinion of removal of saturday mail? guest: i have stated repeatedly that i don't like to see any services, to the american people. they have paid for the services and the money is there, but it's being utilized for other government reasons. they are taking the money that was paid for by the rate payers and utilizing it to subsidize funds that should be paid by the taxpayers. the retirement system's for the department of agriculture workers or the treasury department and all these other different agencies, they get
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appropriated tax dollars and spend the tax dollars and they're supposed to be putting money into retirement funds, but they're not doing that. overages are our zero bridge showing. they are terribly overfunded. any employer must pay workers' comp insurance. the post office was in dire straits this year. it threatens not to make their workers' compensation deposits into the federal government. -- they threatened. what would that affect have on all federal employees? they wrote me back a letter from the government saying no one would get paid. that shows me how much they rely on the postal service money. why would the people from the
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usda and other agencies put their money in there to pay their own people? they need the post office money and service charges from the post office to make sure everyone gets paid. that's not right. that is taking money patrons have paid for oil service and then utilizing it for other government services, which should be paid for by taxpayers. host: high school student test and is our last phone call. caller: hello. what can economists do not do to restore profitability to our postal system? guest: i think this is a misnomer. the post office would be profitable to if they were not overcharged for all these other congressional funds. if they would set that right. all congress has to do and is looked at the lynch bill and a few of these others and recognized the postal patrons have overpaid into the postal
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service which has required the postal service to pay into the congress. if they were to relax those and allow the post office to utilize that money for postage usage, for services for the postal community, the, to do anything else. the post office and employees in the postal service have a great tradition of providing service and cooperating with each other to take care of the problems of global service. we can do that without the congress putting more obstacles in our path. they need to remove the obstacles and the postal service will serve the community as best as possible. host: what happens next in the debate? guest: i think the next battle turns to capitol hill, the struggles. it is a continuing struggle in congress at this time. i don't want to characterize it as a partisan debate. that creates a lot of problems in many areas of government.
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, want this to be a debate about the service to the american people. we think this is a service that the government provide the best and has done well for 200 years or so and we are respected by the american public and we want to continue that. if we don't want to be characterized as a partisan or this or that. we will do our best to educate our people about which congressman support us and which don't. we have bipartisan support from congressman weiner's bill and we are proud of that. host: cliff guffey of the american postal workers union. thank you. we also want to spanx the high school students aboard our campaign 2012 bus in indiana and we want to sta
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family in the over to a dozen other japanese-americans, wyoming's heart mountain internment camp was home. almost 70 years later hear his story on american history tv on c-span three, from the dedication of the heart mountain learning center. american artifacts, explore 19 century america. from the smithsonian's new great american hall of wonders exhibit. for oral histories in 1973 new york democrat elizabeth holtzman became the youngest woman ever elected to congress. one year later as a member of the house judiciary committee she was voted to impeach president. but for the complete we can schedule. for the schedules an hour and box click the alert button. >> and a few moments a look at the future of u.s. space flight. in about an hour jam small talk, the chairman and ceo of the energy company, a phillips. in a discussion of u.s. trade initiatives in afghanistan and
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central asia. later we will be air the washington channel segment with the head of the postal workers union. on washington journal tomorrow morning we discuss the cost of health care. the european union ambassador to the u.s. will take your questions about the economic situation in your. and we will look at the nation's productivity and standard of living washington channel is live on c-span every day at 7:00 a.m. eastern. >> should always start with the assumption that when a politician or a ceo is saying something there not telling you the truth. they may be telling you the truth, but the birds to be on them to prove it. >> he is an eagles out -- scout,
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directed and produced three of the top grossing documentaries of all time and also a best selling author, his latest a memoir is here comes trouble. your chance to call, you know, and we live at noon eastern on the book tv on c-span2. which part of the u.s. constitution is important to you? that's our question in this year's student can competition open to middle and high school students. make a video documentary and tell us the part of the constitution that is important to you and why. be sure to include want them one point of view and video of c-span programming. $50,000 total prizes and a grand prize of $5,000. for all the details go to a student can not work. >> this deal of space exploration technology services company is developing a reusable rocket.
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elon musk was that the national press to talk about the future of u.s. space flight. his company is scheduled to make the first private flight to the international space station in november. this is an hour. [inaudible conversations] >> good afternoon and welcome to the national press club. i'm mark hamrick of associated press were i'm on light covering business and financial news. in this capacity on the 104th president. we are the world's leading professional organization for journalists committed to our future through our program events such as this well fostering a free press worldwide. for more information about the national press club we invite you to visit our website. to donate to programs offered to the public to read national journalism library. you can visit that on the website as well.
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on behalf of our members will want to live like to welcome our speaker here today and those of you attending today's event. our head table and his guests are speaker as well as working journalists for all club members. if you're a pause in our audience would like to note the members of the general public are attending, so it's not necessarily evidence of a lack of journalists to conductivity. you also like to welcome hard to tell public radio audiences. our lunches are featured on a member produced weekly pot catch on the national press club which is available for free download on my chance. you can also follow the action on twitter. after our guest speech will have q&a and as his many questions as time permits. this time to introduce our head table destine please note that a channel as president and the head table does not imply or signify an endorsement of the speaker. the ascii to view to please stand up briefly as your name is announced and we will begin from your right. we begin with pulsing men who is
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a reporter with wto p news and we might note a third-generation press club number. heather is a freelancer comanche is with our book and of the committee. by the way, he else in the u.s. south. chair of are newsmakers committee in doing a great job there as well. communications director with space -- spacex. angela drolen king is transportation reporter at bloomberg news and our members of secretary on our board of governors. tim uses general counsel with spacex and guests ever speaker. get over the podium our fantastic speakers' committee chair, really doing a wonderful job this year. thank you so much. we skipped over our speaker for just a moment. director witt e.m. ps with associated press. the speaker committee member who organize today's event.
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thank you very much. george dewey is senior vice president for marketing and communications. a guest of our speaker. frank morning is deputy managing editor for space, aviation week and space technology magazine. brussels injured as opinion editor u.s. days and will report adam, is vice president client strategy with the anti-government, vice chair of our broadcast committee here at the national press club. please give them all warm round of applause. [applause] [applause] >> one may be inclined to call our guest speaker today a renaissance man. to do that would be to set him back several hundred years, so that would be fair. the south african and canadian heritage, he is an engineer his passion for solving problems necessitated that he become an entrepreneur and inventor. we are told he multitask, is a workaholic, got in at 3:00 a.m.
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this morning. he probably drives fast, but with a preference for energy-efficient vehicles and thanks a lot about life in space. from software businesses to the internet let's not forget about the electric cars, solar energy and space rockets. is france sarah speaker does everything with absolute conviction. even when he believes in something -- when he believes in something he is unstoppable. he is said that if he thinks the stakes are poor enough to will do it, whether the odds of success are high or low. in value very forbes magazine ranked him as one of the nation's 20 most powerful ceos 40 in under. last year time listed him as one of the month hundred people and most affect the world. esquire said that he is one of the 75 most influential people of the 21st century. there have been many other awards and recognition along the way. he bought his first computer at the age of ten and taught himself of the program and by the age of 12 he sold his first
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commercial software for the calendar 64 platform for about $500. at age 17 in 1988 he left his native south africa for western canada to live and work with his mother's family. in 1992 he won a scholarship to the university of pennsylvania where he received an undergraduate degree in business from the wharton school, got a second besses degree in physics. he headed to stanford and a graduate program in applied physics and materials science to create alter capacitors with enough energy to power electric cars. after today's he left to start a company with his brother which provided online content publishing software for news organizations and in 1999 that was acquired for 341 million. next are guest speaker co-founded an online financial services and no payment company. you probably heard of it. in 2001 that became paypall which was acquired by ebay in 2002 for one half billion
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dollars in stock. the use the proceeds to help start space exploration technologies in 2002 where he is ceo and c. teel. in 2008 spacex one a nasa contract to replace the cargo transfer function to support the international space station with astronaut transport in mind. in 2009 the spacex stock and one rocket began the first privately funded liquid fuel vehicle to put a satellite into reported. he is known as an original investor, chairman of the board, and eventual had a product designer tesla motors ray led design of the all electric text -- tesla road. today also sells electric power train modems. the primary chairman. our guest speaker has been compared to henry ford, howard hughes, and even the fictional town in stark, i am an. he has been described as the inspiration for robert downey's in his interpretation of the character and had a cameo in
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nine and two. appropriately enough to the spacex factory was used in the film. he is not without critics and skeptics, including some who doubt that spacex can sustain the low-cost business model that he insists he is proving them wrong today. the founder of paypall, the world's largest internet payment systems ico and product architect of tesla motors, manufacturer of the all elected to slow restaurant bottle bill and non-executive chairman of solar city, a leading provider of solar power systems is here today, and we are grateful for that, to talk about the future of human spaceflight as head of space x, developer of rockets and vehicles from mission start toward and beyond. our guess you'd space exploration as a kaynine step in preserving expanding human life and has promoted making life multi planetary starting with mars. it is inappropriate follow-up to our luncheon this summer that
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featured nasa administrator charles bolden. all of this serving as proof that you do not need to be a rocket scientist to be a national press club luncheon speaker, but it helps. please give a warm welcome to one of the most interesting personalities and entrepreneurs are date, mr. elon musk. [applause] [applause] >> thank you for having me. it is an honor to speak here before the national press club. i have an exciting announcement with respect to space, and that think one which should be providing some inspiration and some belief that the innovation is alive and well and going into an interesting direction. i'm going to get to that, but i'm going to preface that with the logic that explains why such
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a thing is important. it may not be immediately obvious. so first of all going back to wyman and electric cars and solar power and internet and stuff, it goes back to when i was in college and trying to the think of the most important things and would affect the future of humanity. what could have a significant effect. the three things that i came up with for the internet, sustainable energy, but production and consumption, and in space exploration. simply making a rival to planetary. i did not expect and i wasn't jealous of the involved in all three of those. as a result of some success in the internet arena, that give me the capital to get involved in a very high capital endeavors like
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cars and rockets which really are very high capital. so the reason for -- on mostly going to talk about space. i want to explain why at the space is really important. what about space. i believe from our rational framework of logic. so you start with how you decide that anything is important. i think the lens of history is a helpful guide here. the things that may seem important in the moments that actually aren't that important in the grand scheme, over time if you look at things over a broad span of time to mull things that are less important follow wait. if you look good things from the
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broadest possible span of time as it relates to life itself, the evolution of life has been primitive life started around three and a half billion years ago. the important steps in the evolution of life. obviously there was the advent of symbols of life. differentiation to plants and animals. left on from the ocean to land. there was mammals, consciousness. i would argue on that scale should fed left becoming malta planetary. in fact, i think if consciousness -- it is the next actually because you really kind of the consciousness to design vehicles that can transport life vehicles that can transport life over hundreds of millions of miles of irradiated space to an environment that they did not evolve to exist and. it would be very inconvenient if there was another plan just like
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earth thereby. but that is unlikely and as it turns out not the case. so i think you couldn't really -- there's no way for lasted just -- life to get over to mars. you need consciousness. it is the next natural step. some if one could make a reasonable argument that something is important enough to fit on the scale of evolution then it is important. it may be what the little bit of our resources. and one can also think of it from the standpoint of life insurance. there is some chance as a result of something humanity does or as
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a result of something natural market giant asteroid hitting a something that civilization and life as we know it could be destroyed. clear evidence for life been destroyed multiple times off the record, so we don't need to guess it's something that can occur. has occurred. the permian a station being a particularly interesting one because i think that destroyed somewhere between 90 and 95 percent of all species on earth. it doesn't tell the whole story because most of the species or fungi. so unless you're a much from your out of luck. if we think it's worth buying life insurance an individual level perhaps it's worth spending more than -- spending something on life insurance for life as we know it. and arguably that expenditures
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should be greater than zero. then we can just get to the question of what is inappropriate expenditure for life insurance. in no, i think it probably if it's something like a quarter of a percent of gdp, that would be okay. most people would say that's not too bad. you know, you wanted to be some sort of number that is much less than we spend on health care, but maybe more than a spin on lipstick. something like that. and i like lipstick. stella cut anything against the. so i can wait for that, to go out there. [laughter] that is kind of the thing that i think is important.
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i think it's also one of the most inspiring and interesting things that we could try to do, one of the craze of ventures that humanity could ever embark upon. and you know, life has to be more than about solving problems. if all that life is about is solving problems among why bother getting up in the morning. there have to be things that inspire you and make you proud to be a member of humanity. you know, the programs are an example of that. only a handful of people and yet actually we all went to the men. we went with them vicariously. we shared in that the venture. but nothing anyone would say that was a bad idea. that was great. so we need more of those things. we need some of those things.
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even if someone is in a completely different industry in a completely different more of life is still something that is going to make you feel good about the world, and that's another reason why i think we should turn to these are things. so now, let's get to the question. well, how'd you make life multiple of torre? one of the fundamental obstacles? it's all well and good if everyone agrees that is worth doing, but if we can't do it, it doesn't matter. so the pivotal break through that some company has to come up with to make life malta planetary is a fully and rapidly reusable or with less rocket. this is a very difficult thing to do because we live on the planet where that is just barely possible. if every warlord it would be
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easy. even for an expendable launch vehicle where you don't a tentative recovery, a lot of smart people have done their best to optimize the weight of the vehicle. you get maybe two to 3 percent of your liftoff wait to orbit. that is not a lot of room for error. if your racket in said being just a little bit heavier you did nothing to orbit. this is why only a few countries of every store but. matthews said will let's make it reusable, which means that you've got to us strengthen the stages, add weight. no more protection. do have to do a lot of things he still have to have a useful political orbit. now you're saying of the meager 23 percent, maybe if you really did get to four you have to add
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all that necessary to bring the rocket stages back to the launch pad and be able to refine them and still have useful payload to orbit. it's a very difficult thing. this has been attempted many times in the past and generally what happened is people conclude that success was not one of the possible outcomes and the project has been abandoned. some government projects that going but then eventually they get canceled. so just a very tough engineering problem. it wasn't something that i thought -- was unsure it could be solved for while. but then i think just relatively recently in the last 12 months are so i've come to the conclusion. and i think spacex is going to turn to do it. we could fail.
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i'm not saying will have success, but we're going to try to do it. we have a design that on paper during the calculation doing simulations does work. now we need to make sure that the simulations and reality greet it is generally when they don't reality wins. so that's to be determined. the simulation that you may have seen in all of becoming in was posted to our website ride around now, we will sell you a simulation of what we plan to do that simulation is mostly accurate, but there are few areas that are inaccurate. in some cases to stick to timing constraints or unable to work with the simulation people to
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get it completely accurate, and in some cases your keeping a few technical things on our hat, but it gives you a pretty good idea of what we intend to do, which is to land -- basically for the first stage after state separation turn the stage around, realize the engines, booze back the launch pad and with the upper states after jumping out the satellite would drag in the spacecraft, do a deorbit burn, re-enter. steer back to a launch pad. you don't actually need wings. a common misperception. just some leftover drag number. steer back to the launch pad and then possibly with the upper stage. so we will see if this works, but it's going to be an exciting
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journey. and if it does work it will be pretty huge. if you look at the cost of a rocket, quite a big rocket, million pounds of thrust, and it is the lowest cost rocket and the world. even so it's about $701,060,000,000. but the cost of the fuel and oxygen and so forth is only about $200,000. so if we can reuse the rocket a thousand times then that would make the capital cost of the rocket for a loss only about $50,000. there would be made in some other things and factor and, some overhead allocation, but it would allow for about a hundred fold reduction in launch cost. and this is a pretty obvious thing if you think about it.
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you can imagine that airplanes are not reusable very few people fly. 747 is about $300 million. you would need two of them for roundtrip, and i don't think anyone here has paid half a billion dollars to fly. the reason is because those plans can be used tensive thousand times, and so you're really paying for his fuel and pilot cost and incidentals. so that's why it's such a giant difference. another way, i mention that we could probably afford a quarter of a percent of our gdp for making life multi planetary. that is the cost if you have a fully reusable rocket, but the cost if you don't have a fully reusable rocket on the san barometer would be a hundred
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percent of gdp, and that would mean no money for food, health care, or anything else and obviously that's impossible. that's why i think the fully reusable system is fundamentally required for live to become multi planetary and for us to establish / on mars. mars is the only realistic option for another planet. bean is being too hot and mercury been way too high. jupiter being and gas giant. the men's of jupiter are a possibility, but it's much further out. carter and a lot of different ways. the man is too small. not just have a little base. a little base is not that interesting. self sustaining human civilization is. multiple planets were left and continue in the event of a climate here on earth.
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yes. so i think this is pretty exciting. that think everyone in america and arguably the rest of the world should be pretty fired out about what we're doing, and hopefully wishes well. we will do our best to succeed in this regard. yes. it is definitely going to be adventure. i will say one final thing which is some of those people say what is the business model for mars? sometimes they think, can you myanmar's and bring things back? that is not realistic. and so is going to be far cheaper to mind things i. but i do think that there is a business model, if you can
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reduce the cost of flight to mars to around the cost of a middle-class home in california, does seem to be rising overtime, maybe not recently, but certainly pretty expensive. maybe to around half a million dollars, then i think you would have enough people would buy a ticket and move to mars to be a part of creating a new plan and be part of the founding dean of a new civilization. you would have to have a -- un obviously have to be willing to up, you know, have quite an appetite for risk and venture, but the 7 billion people on earth now, probably 8 billion by the midpoint of the century. so even if one of a million people decided to do that, that's still a dozen people. and i think probably more than
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one a million would decide to. that is what i think is the mars business model. and then all smelly marston probably export intellectual property like software and inventions of things like that. the impact of photons. a better way to go. all right. i'm happy to answer any questions. [applause] >> thank you very much. [applause] [applause] >> well, thank you very much. obviously given the diverse nature of their own interests and pursues u.s. to stay here and a graduate of water, which is required on earth. if you went to the man that might be more difficult. so we're going to start with the space peace. if you just stand up here read by my side we will just when it won by one. talk about how you see the party of the publication of the technology they just ascribed sort of in the near and
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intermediate-term. >> well, in the near term the technology will be applied to launching satellites and to resupplying the space station, taking kara and corrupt there. that is the near term thing, and that is what spacex is predicated on. we're doing okay. about $3 billion of revenue. >> that's better than abcaeight. >> it's spread out over the next five years, but not all at once. we do lots of things to get that money, but that is not bad. so we have been profitable for the last four years, not use a profitable, but moderately profitable. we expect to be the same this year, and that thing the amount of money going out exceeds the amount of money coming in, then
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simmer letter will die. we have to make sure that we have more money coming in. but that seems to be going pretty well prexy describes the earlier the right now you are the leading vendor for launching satellites into space right now. >> well, it's measured by launch contracts awarded, that is correct. the united states has bit of competitive in the edge massillon's market for a long time. russia's been a leader. india and china, although china is growing rapidly. except the last few years to be the. >> obviously you're very interested in performing in innovation, and that is something is seen as the as this as well. in the space business specifically how can we maintain
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a competitive edge and are we maintaining it in the sector generally. >> well, as far as launches concerned, i think it is fair to say that the united states has by far the most competitive flaunted ability with space as a result to spacex. and the only realistic potential competitor is china. the easiest thing to being with national government. this heavily have set their sights on us and told us that. but that's okay. at think will win. but we have actually with respect to cut -- chess strategy of filing the minimum number of patents. refile very few patents. very careful about cyber security and careful about physical


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